Wednesday, 21 October 2015

The eSourcing eVolution Part III - The Future

This is the final part (read part 2 here) of a three piece blog providing an in-depth analysis of the evolution of eSourcing around the question: 

"What would Market Dojo be like today if it had started 10 years earlier?" 

In this section, we’re going to use what we’ve learned about the past to think about the vision of the future. Through analysing what we’ve learnt so far, a touch of market knowledge from the directors at Market Dojo, and a dash of foresight as to what we think the future holds for eSourcing, we should be able to adapt to any changes in the market/technology.


So how do we prepare ourselves? How do we mitigate the risk of becoming “just another” large provider? There are many interesting aspects we need to look at in regards to this and a number of potential concerns we need to be aware of.


Alun Rafique and Nick Drewe, co-founders of Market Dojo shared some thoughts on areas to watch out for in the future:


Mobile Technology


There have been recent changes in how Google perceives websites for ease of use with mobile devices. With respect to this and the future of design, we need to make sure we are responsive, searchable and usable across the mobile technology of the future.

Google (power of the web/search)
This is the biggest unknown and potentially the biggest competitor (at the moment, our biggest competitor is still email).  Will this develop enough and become intelligent enough to make eSourcing applications obsolete?


To mitigate this risk, we must do as any other successful modern SaaS provider and focus on the last ‘S’, not to mention being dynamic in our R+D.


We must ensure that our support is second to none on areas where strategy is crucially important. We predict that long gone will be the days of short-sighted support functions.  Instead the main differentiator in industry will be support personnel who focus on resolution of queries instead of simply noting them.  Training/help desk/light consultancy is where the battle may be fought.  Although this does not mean there is a need for consultancy alongside our offering.


APIs
The ability to integrate between solutions is already possible, but in the future it is set to become even more simple. We must look at ways to make it even easier to integrate with any product through standard connectors so that best of breed becomes as attractive as an ERP solution.


Silicon Valley investments
There seems to be a current trend at the moment within procurement software for Venture Capitalists to throw money into investing in particular areas such as P2P and eInvoicing.


To help us stay ahead of this, we must keep focussing on our USPs by continuing to provide an easy to adopt, completely transparent pay-as-you-host pricing model. That is how we will aim to combat this type of competition along with our friendly one-to-one service.


Amazon/Google/Apple B2B platform


eSourcing and P2P are fundamentally different. One is strategic. One is operational. It is unlikely that these eMarketplaces are going to be in direct competition with our focus on eSourcing.


However, diversification is very important. And we have our own eMarketplace concepts (focussing on sourcing rather than fulfilment) which should help protect us in the future. Watch this space…


Eradicating the user interface


Moving from slick user interface to 'no user interface', as per this Coupa article.  A rather controversial idea, but we can see some logic that instead of having to log into a tool every day, instead it fits around your life so you can interact with it outside the tool, e.g. suppliers responding to events via email with auto-doc upload/download, auto-messaging, auto-comparison of bids, etc.


True commoditization


As technology develops and the knowledge of eSourcing expands, the number of people using eSourcing will increase.  We will hopefully begin to see true commoditization of the process and tools, so it really does just come down to price in the lower end of the spectrum.  Eventually, it won’t just be large and medium sized enterprises utilising eSourcing, the smaller SMEs will be aware of and embracing it too.


Centralised eSourcing teams move in conjunction with local self-serve teams who even use the tools to get quotes on low value tenders of a few hundred pounds.


(See our video on the four stages of technological growth taken from a TED lecture.)


Not game changers, but here are some other areas to be aware of:


Voice Activation
Keeping up to date with developments eg. Google voice, Siri, etc. and how this may possibly impact us.
Geo-locational sourcing
So you can find better suppliers locally and search locally.
Integrated market information
Such as global new stories and how they affect your sourcing events.
More focus on AI
The software could take actions when it 'thinks' it is needed. e.g. delay an auction due to lack of liquidity, or suggest a better lot structure based on the bids received.
More automation
So the software will actually create and publish events without you needing to do anything.
Newer, more flexible technologies
As technology continues to grow and develop, we need to ensure we keep up to date with the latest news and trends  and ensure that our product move in line with this.
Commoditized combinatorial, expressive and transformational eAuctions
Making this usable to the majority.
Interactive content
In relation to how we market ourselves, we must ensure our content stays in line with technological changes and becomes more interactive.
Developing Countries
Competition from these countries is vastly improving and we must not overlook them. We can counteract this by keeping our development dynamic and increasing our brand marketing strategies. We must also market to these countries and think about ways to collaborate with as well as repel competition.
Public Sector Procurement
A big shake-up in the public sector software market to disrupt the legacy tools with their complex workflows and procedures to be a slick tool that people enjoy using.
IT will no longer play a part in the selection of SaaS tools
No more 100-page RFIs asking what software stack SaaS software is using and what the data hierarchy looks like.

Security barriers
Utilising new technology to address these and make eSourcing even more accessible.

Marketing
How will people find us in the future, compared to how they find us now?
How will the power of search change in the future?
At the minute, the focus is on Content Marketing, but what next?


Exciting times lie ahead of us at Market Dojo.


In hindsight, with what we have learnt from looking at the past and analysing the potential future of an older Market Dojo, we must continue to pro-actively develop, adapt to and overcome any fluctuations in the ever-evolving technological environment, whilst remaining true to our brand values.


The latter is very important. By embracing new technologies to enable more seamless integration with other providers, we should be able to remain true to our original ideologies of putting the customer at the forefront of everything we do, whilst making our product as easy to adopt as possible and bringing eSourcing to the forefront of every business.


About: Market Dojo provides accessible eSourcing software. Find out more at www.marketdojo.com

3 comments:

  1. Great post - I actually think three of the 'change areas' defined above are likely to combine and usher in more change (for procurement professionals at least) than all of the others combined: AI, automation, and technology commoditization.

    As automation (which increasingly includes AI - especially in the context of robotic process automation or RPA) becomes common practice rather than science fiction, the role that procurement plays in applying technology will change significantly. I happen to think that procurement teams are likely to become smaller over time. In large companies, procurement will automate their own function to streamline operations. In smaller organizations, automation will all but (emphasis on all but) eliminate the need for procurement headcount altogether.

    I don't think we should see any of this as bad news, however. There are amazing thought leaders in this space, and I assume none of them think we have reached the end of procurement's growth curve. It is just time to start thinking of growth in terms other than numbers.

    As procurement's role in the enterprise becomes more pervasive, we integrate further with the operational areas we support. In a strange way, by pulling more people and processes into procurement, procurement as a defined function 'goes away'. Acting in a commercially responsible manner becomes the way of doing business. And while there will always be specialists to keep plans on track, companies won't have the need for a team of people to battle for savings and compliance. Instead we can work in alignment with the rest of the company to improve their capabilities and the performance of the whole company, not just the 'addressable' parts of its spend.

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  2. Hi Kelly. Thanks for commenting. The question on the future of Procurement is interesting and another person was questionning how we would exist with the advent of things like the Amazon eMarketplace.

    Initially I would say this is a bigger issue for P2P then strategic procurement. Also you could make an analogy and relate the different sales strategies, {Internet sales, inside and field sales}, to Procurement. You could say that whilst some sales techniques are removing people from the equation such as internet sales and some strategies reduce the need for people such as inside sales, within procurement you could draw the same parallel.

    However, would you be ever able to remove field sales (in the medium term future) and the similar question whether could easily remove the strategic procurement people and would they be satisfied with the mass volume amazon 'esk tools. Some very interesting questions.

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  3. It was interesting to read the blog on the evolution and future of eProcurement and eSourcing. I think that whilst it is true to say that the majority of big ticket eProcurement solutions on the market at around the turn of the millennium were indeed on-premise (Ariba, Freemarkets, CommerceOne et al), many of the on premise systems were predicated on a relatively open level of integration with suppliers, prospective suppliers and bidders. EDI was indeed the comfort blanket of choice for big enterprises however eBay levels of technology (I'm a sourcing expert not a technical architect) were being utilised to bring suppliers catalogues on to the platforms. In the complex eAuctioning world I was playing in at that time was seeing complex engineering components, bespoke work wear and indeed IT Application development services being eAuctioned for FTSE250 companies. It was certainly a world away from the auctioning of PC's and Pencils.

    I also get slightly annoyed over the distinction between Cloud and SAAS. It is the same as claiming that Sky invented Football in 1992. These eAuction solutions were not on Premise, but were delivered SAAS, over the internet. At the end of the day SAAS and Cloud computing are just synonyms for "someone else's computer".

    On to the Present, I think the blog omits some key issues

    Fifteen years ago several providers were indeed offering eProcurement and eAuction services based on a service fee model with no support or implementation fees if the customer couldn't / didn't want to do it themselves, Contracts were long in that there was a 12 or 24 month commitment but costs were amortised over a longer period if the customer wanted lower payments. Auctions were ran per event, at an admittedly extortionate price of £25k per event, but the alternative that we sought to sell, but to my recollection never did, was on a gain share basis of 25% of the savings beyond the expectation of the customer.

    Many of the players at the time weren't acquired. Headlines show that Ariba etc were, but an important aspect was that the Market Dojos of their day (Biomni, BarclaysB2B, ProcureNet etc) either folded or changed their business model as the volume of transactions needed to sustain the business model wasn't there in the market. Selling Auctions was particularly hard work, as procurers were deeply suspicious of them and I remember the CPO at a very well known high street retailer telling me at the time (circa 2001) that they would never "use eAuctions as part of their sourcing as they only do business with people." The majority of companies were taking a wait and see approach.

    Finally, nothing ages quicker than the future so I leave the predictions to the astrologers. Having said that I am surprised that your future look has somewhat dismissed the moves in to the corporate marketplace of Amazon and Google. The eSourcing market place should be worried, if not terrified by AmazonBusiness. Whilst its true that eSourcing and P2P are different, why would I pay a Market Dojo when I could go to Amazon and access to the cheapest prices driven by open and transparent competition from almost all competitors with seamless integration in to my P2P environment. Disintermediation is the key to market disruption and you should ignore this threat at you peril.

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